Senate working on fiscal proposals; Reid and McConnell are talking

Associated Press

Senate Majority Leader Harry Reid of Nevada is surrounded by reporters as he leaves the Senate floor to meet with Senate Democrats regarding the government shutdown and debt ceiling on Capitol Hill in Washington on Saturday, Oct. 12, 2013.

Sun coverage

With just five days to go until the debt ceiling prompts the country to default on its debts, the epicenter of fiscal deal-making has moved to the Senate, where party leaders Harry Reid and Mitch McConnell are talking.

But the leaders’ conversations, which began at 9 a.m. Saturday, are the closest thing there has been to a breakthrough in the nearly two weeks since the government shutdown started, raising the stakes of the fiscal crisis.

“I hope everyone understands how positive this is,” Reid said Saturday afternoon. “It’s the first discussions we’ve had here, period, during the whole artificially driven shutdown.”

Reid's and McConnell’s relationship, which spans 26 years, including time spent together as party whips, is far from perfect. But it has yielded more successful returns on major crises in recent years than has the negotiating channel between President Barack Obama and House Speaker John Boehner, which hasn’t yielded a real crisis workaround since Boehner and Obama tried and failed with a “grand bargain” in 2011.

In a meeting at the White House earlier this week, House Republicans suggested they would need to revisit the grand bargain topics of entitlement reforms in exchange for raising the debt limit, in order to strike a deal to reopen the government and avoid default, according to reports.

It’s a pivot from what the House’s terms have been throughout this standoff. Until a few days ago, the House’s terms for raising the debt limit and restoring government funding have been making significant changes to Obamacare, such defunding the law, or at the very least, a one-year delay of the individual mandate to purchase health care, which would kick in Jan. 1.

“Isn’t it interesting, everybody, how that’s not part of the discussion anymore?” Reid said to reporters Saturday afternoon. “Obama is no longer their No. 1 issue.”

Senate Republicans, meanwhile, have long since decided that trying to gut Obamacare isn’t logical.

“I think the best thing would be for the House of Representatives to produce a measure that makes responsible changes to Obamacare,” said Sen. Lindsey Graham, R-S.C. “Not a defund, not delay, but responsible changes.”

Evan Vucci / AP

Senate Minority Leader Mitch McConnell of Ky., is pursued by reporters after returning to Capitol Hill in Washington, Friday, Oct. 11, 2013, following a meeting between Republican senators and President Obama at the White House. Republicans from the House of Representatives are offering to pass legislation to avert a potentially catastrophic default and end the 11-day partial government shutdown as part of a framework that would include cuts in benefit programs, officials said Friday. it standoff.

Sen. Susan Collins, R-Maine, tried to float such a proposal Friday, when Republican senators met with Obama at the White House. Her measure would have exacted a repeal of the medical device tax — a tax both parties dislike but funds part of Obamacare — as well as a few other concessions, in exchange for a six-month extension of the debt limit.

Democrats rejected the offer.

“Collins came up with a plan with six things in there that they put in there, that’s from their side,” said Sen. Tom Harkin, D-Iowa. “Republicans are not doing us a favor by extending the debt limit. ... If they’re going to demand things like that, we’re going to demand things like: Raise the minimum wage.”

But rank-and-file members were, nonetheless, bullish about the prospects of making a deal with Senate Republicans. If only they were the sole Republicans who needed convincing.

“If we were only negotiating with Senate Republicans, I think we could find a way through this,” said Sen. Chris Coons, D-Del.

Reid told reporters that he wasn’t worried about trying to strike a deal with McConnell that would also be good enough for Boehner’s Republicans.

Reid and his Democratic deputies then headed to the White House on Saturday afternoon to coordinate their actions in these next critical days.

The Democratic party line remains that they’d like to see a clean budget extension — for about six weeks — and the debt ceiling lifted through the end of 2014, before they enter the negotiating room on the finer fiscal points where they disagree.

But it seems unlikely that Senate Republicans, who may not all agree with the House’s tactics, would fully roll over to the Democrats’ side in the next five days before the debt limit is met Thursday.

In voting against the Senate’s proposal to suspend the debt limit through 2014, Sen. Dean Heller, R-Nev., said he couldn't vote for raising the debt limit without preconditions to bring down the debt itself.

“Our nation cannot afford to continue raising the limit on our nation’s credit card without making the difficult decisions that prevent the country from incurring even more debt,” Heller said in a statement Saturday afternoon.

On Saturday, the House appointed 17 of its members to a conference committee dedicated to hashing out their differences on the farm bill.

That puts the legislative process surrounding the farm bill at a far more advanced stage than the measures more directly associated with this fiscal standoff: Despite months of threats and accusations, when it comes to the budget process, either one or both houses of Congress have failed to agree to a conference committee or appoint lawmakers to carry out the necessary discussions.